Innovators, investors and EU Institutions discuss plans for delivery mechanism

[Brussels, Wednesday 19 June] Today at IP Europe’s annual SME event, representatives of R&D intensive businesses and start-ups met with European Long Term Investors Association (ELTI), National Promotional Banks and financial Institutions (NPBIs), and European Commission. They discussed the scale and delivery mechanism for a pioneering European initiative called Patent Factory Europe, which will help innovative businesses develop Intellectual Property (IP) led growth strategies.

For the first time ever, the EU budget includes a legal basis – as part of the InvestEU regulation – to support innovative enterprises seeking to protect their R&D investments by helping them obtain intellectual property titles, such as patents[1]. The new mechanism, to be created within InvestEU, should help create a virtuous circle of innovation and investment for growth for European innovators. It will help European start-ups and SMEs finance the development of new patents and use their strong IP portfolios to raise higher levels of growth capital without selling too much equity. This in turn will help make Europe the World’s leading innovation ecosystem.

InvestEU – which aims to boost European competitiveness has been approved for funding by the European Commission, Council and Parliament within the new EU Multiannual Financial Framework (MFF) 2021 – 2027. The MFF has been approved but the precise level of funding to be allocated for the advisory services for innovative businesses within InvestEU has not yet been announced.

Vice-President of the European Commission Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “InvestEU will be our flagship programme for a sustainable, resilient and competitive European economy. It will further boost investment in key areas like circular economy, artificial intelligence, 5G and connectivity, with the new option to work directly in partnership with promotional banks in Member States. InvestEU will make access to finance and advisory services easier for SMEs and innovative businesses and help them to scale up.”

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “”Since 2014, the European Union has been supported innovative start-ups and SMEs: thanks to the support of the Juncker Plan, nearly 240,000 French companies have already benefited from financing on favourable terms. With InvestEU, we want to reinforce this dynamic in the years to come, for a competitive and innovative Europe which creates jobs.”

Jose Carlos Garcia de Quevedo, President of Spanish National Public Investment bank (ICO), said: “Innovation is a key factor for a sustainable economic growth and intellectual property remains an issue of utter importance for a technology and innovation based economy. ICO seeks complementarity with other economic agents and offers a wide range of products for SMEs to cover their investments needs, from medium-long term loans to venture capital in all the cycle phases, giving a strategic priority to European cooperation through financing schemes between MFF/InvestEU and national funding mechanisms”

Laurent Zylberberg, Chairman of European Long Term Investors Association (ELTI), said: “SMEs are at the heart of the European economy, ELTI, the European voice of National Promotional Banks and Institutions (NPBIs) stand ready to assist wherever needed the driving forces of our Continent. By providing financial means to develop their activities and protect their assets whether they are tangible or untagible, NPBIs offer to SMEs significant project engineering expertise, together with strong financing capacities and in-depth knowledge of local actors. InvestEU appears as a clear opportunity, in the near future, for NPBIs to reinforce their support by having a direct access to European financial instruments.”

Francisco Mingorance, Executive Secretary of IP Europe, said: “By mobilizing up to €150 million per year – €1 billion over 7 years – through the InvestEU budget and corresponding national funding mechanisms, innovators can finance patent generation, advisory services on IP-led growth strategies, and attract more investors that can finance the growth of innovative European businesses and ultimately make Europe the world’s leading digital innovation ecosystem.

Didier Patry, CEO of France Brevets, said: “Evidence from the first ‘Fabrique à Brevets” pilots in France, indicates that the investment to obtain patents protecting the R&D of innovative SMEs and start-ups has a multiplier effect on the level of investment that these European innovators can secure in the following 12 to 24 months.”

Tuomas Nousiainen, Co-Founder of Apollonian, said: “Innovative companies need help and support in securing and managing their intellectual property assets. The Patent Factory Europe initiative is an important step in the creation of a new instrument to help knowledge–intensive companies to leverage IP assets, retain competitiveness and increase their overall investment readiness.”

IP Europe estimates that approximately one third of start-ups in Europe could develop and secure significant growth financing from private sources by investing an average of 150,000 euros in patents and IP strategic advisory services while minimising the dilution of their equity. In 2018 approximately 3000 venture capital deals were reported in Europe.[2] In total supporting these companies would require at least €150 million per year or €1 billion over 7 years, to be made available across all of Europe through the MFF/InvestEU with co-funding from corresponding national funding mechanisms.

The group discussed the ‘Patent factory Europe model’ with representatives of the European Commission, the European Parliament, with European Long Term Investors Association (ELTI), National Promotional Banks and financial Institutions (NPBIs)as well as the Finnish and Croatian Presidencies of the EU. IP Europe and the meeting Chairwoman, Dr Lieve Fransen, called on the European Commission to develop the advisory services as soon as possible by launching a pilot initiative now.

[1] InvestEU Recital (36 a); Article 20 – paragraph 2 – point f and Annex II – point 8

[2] Pitchbook 2018, 2018 Annual European Venture Report https://pitchbook.com/news/reports/2018annual-european-venture-report

For more information: European Commission: Press release 18.04.19